Global crude production decreases

London: Global oil production fell for the first time in five years in 2007 and reserves also declined as prices rose to records, BP said in its annual Statistical Review of World Energy.

Crude oil production dropped 0.2 per cent to 81.533 million barrels a day last year, from 81.659 million barrels a day in 2006, the London-based company said. Proved reserves were 1,237.9 billion barrels at the end of last year, compared with a revised total of 1,239.5 billion barrels for 2006.

Crude oil prices have doubled to in the last year to more than $130 a barrel as demand from China and India jumped and global production stagnated. That's fanning inflation and slowing global economic growth.

"The defining feature of global energy markets remains high and volatile prices, reflecting a tight balance of supply and demand," chief executive Tony Hayward, said. "These have put issues such as energy security and alternative energies at the forefront of the political agenda worldwide."

Flagging supply from regions including the North Sea and Mexico has lent support to the theory that world oil output has "peaked", a view held by analysts including Matthew Simmons, chairman of investment bank Simmons & Co. International and investor Boone Pickens of Dallas-based BP Capital. Others, including BP's Hayward, have said production will keep rising.

Global oil consumption rose 1.1 per cent to 85.22 million barrels a day last year, BP's review said. In China, the world's second-largest consumer, demand rose 4.1 per cent to 7.855 million barrels a day. US consumption fell 0.1 per cent to 20.698 million barrels a day.